With Respect to the Poll-Tax there are many Objections against it, but in some of the States a more considerable Poll Tax already exists, without Inconvenience. The Objections are principally drawn from Europe, by Men who do not consider that a Difference of Circumstances makes a very material Difference in the Nature of political Operations. In some Parts of Europe, where nine tenths of the People are exhausted by continual Labor to procure bad cloathing and worse Food, this Tax would be extremely oppressive. But in America, where three Days of labor produce Sustenance for a week, it is not unreasonable to ask two Days out of a year as a. Contribution to the Payment of public Debts. Such a Tax will, on the Rich, be next to Nothing, on the midling Ranks it will be of little consequence, and it cannot affect the Poor, because such of them as are unable to labor will fall within the Exception proposed. In fact, the Situation of America differs so widely from that of Europe, as to the matter now under Consideration, that hardly any Maxim which applies to one will be alike applicable to the other. Labor is in such Demand among us, that the Tax will fall on the Consumer. An able bodied Man who demands one hundred Dollars Bounty to go into military Service, for three Years, cannot be oppressed by the annual Payment of one Dollar, while not in that Service. This Tax also will have the good Effect of placing before the Eyes of Congress the Number of Men in the Several States; an Information always important to Government.
The Excise proposed is liable to no other Objection than what may be made against the Mode of Collection; but it is conceived that this may be such as can produce no ill Consequences. Excise Laws exist, and have long existed, in the several States. Of all Taxes those on the Consumption of Articles are most agreable; because, being mingled with the price, they are less sensible to the People. And without entering into a Discussion with which Speculative Men have amused themselves, on the Advantages and Disadvantages of this Species of Taxation, it may be boldly affirmed that no Inconvenience can arise from laying a heavy Tax on the Use of ardent Spirits. These have always been equally prejudicial to the Constitutions and Morals of the People. The Tax will be a Means of compelling Vice to support the Cause of Virtue; and, like the Poll Tax, will draw from the Idle and Dissolute that Contribution to the public Service, which they will not otherwise make.
Having said thus much on the Propriety of these Taxes, I shall pray leave to assure you of my ready Acquiescence in the Choice of any others which may be more agreable to the United States in Congress ; praying them nevertheless to consider, that as the Situation of the respective States is widely different, it will be wise to adopt a Variety of Taxes, because by that Means the Consent of all will be more readily obtained, than if such are chosen as will fall heavy only on particular States. The next Object is the Collection, which for the most obvious Reasons ought to be by Authority derived from the United States. The collecting of a Land Tax, as has been observed above, will be very simple. That of the Poll Tax may be equally so, because Certificates of the Payment may annually be issued to the Collectors, and they be bound to return the Certificates or the Money, and empowered to compell a Payment by every Man not possessed of a Certificate. If, in addition to this, those who travel from one State to another be obliged to take out and pay for a new Certificate in each State, that would operate an useful Regulation of Police; and a slight Distinction between those and the common Certificates, would still preserve their Utility in numbering the People. It is not necessary to dwell on the Mode of collecting these Branches of Revenue, because (in Reason) a Determin[ation] on the Propriety of the Taxes should precede it. I will only take the Liberty to drop one Idea with Respect to the Impost already required. It is conceived that Laws should be so formed, as to leave little, or nothing, to the Discretion of those by whom they are executed. That Revenue Laws in particular should be guarded in this Respect from odium, being (as they are) sufficiently odious in themselves. And, therefore, that it would have been well to have stipulated the precise Sum payable on different Species of Commodities. The Objection is, that the List (to be accurate) must be numerous. But this accuracy is unnecessary, the Description ought to be very Short and General, so as to comprize many Commodities under one Head; and the Duty ought to be fixed according to their average Value. The Objection against this Regulation is, that the Tax on fine Commodities would be trivial, and on coarse Commodities great. This indeed is true, but it is desirable for two Reasons. First, that coarse and bulky Commodities could not be smuggled to evade the heavy Duty; and that fine Commodities would not be smuggled to evade the light Duty. Secondly, that coarse Commodities (generally speaking) minister to the Demands of Necessity or Convenience, and fine Commodities to those of Luxury. The heavy Duty on the former would operate an Encouragement to produce them at Home, and by that Means a Stoppage of our Commerce in Time of War would be most felt by the Wealthy, who have always the most abundant Means of procuring Relief.
I shall now Sir take the Liberty to Suppose, that the Revenues I have mentioned, or some others to the Amount of at least two Millions net annual Produce, were asked for and obtained, as a Pledge to the public Creditors; to continue untill the Principal and Interest of the Debts contracted, or to be contracted, should be finally paid. This Supposition is made that I may have an Opportunity (thus early) to express my Sentiments on the Mode of Appropriation. It would be as follows. Any one of the Revenues, being estimated, a Loan should be opened on the Credit of it, by Subscription, to a certain Amount and public Debts of a particular Description (or Specie) be received in Payment of the Subscriptions. This funded Debt should be transferable, under particular Forms, calculated for the Prevention of fraudulent, and facilitating of honest Negotiations. In like Manner on each of these Revenues should Subscriptions be opened, proceeding by Degrees so as to prevent any sudden Revolutions in Money Matters; such Revolutions being always more or less injurious. I should farther propose, that the Surplus of each of these Revenues (and Care should be taken that there would be a Surplus) should be carried to a Sinking Fund, on the Credit of which, and of the general Promises of Government new Loans should be opened, when necessary. The Interest should be paid half yearly; which would be convenient to the Creditors and to the Government, as well as useful to the People at large: because by this Means, if four different Loans were opened at different Times, the Interest would be payable eight Times in the Year, and thus the Money would be paid out of the Treasury as fast as it came in, which would require fewer Officers to manage the Business, keep them in more constant and regular Employment, dispense the Interest so as to command the Confidence and facilitate the Views of the Creditors, and return speedily the Wealth obtained by Taxes into the Common Stock. I know it will be objected, that such a Mode of Administration would enable Speculators to perform their Operations. A general Answer to this would be, that any other Mode would be more favorable to them. But farther, I conceive, first, that it is much beneath the Dignity of Government to intermeddle in such Considerations. Secondly, that Speculators always do least Mischief where they are left most at Liberty. Thirdly, that it is not in human Prudence to counteract their Operations by Laws; whereas when left alone they invariably counteract each other. And fourthly, that even if it were possible to prevent Speculation, it is precisely the Thing which ought not to be prevented; because he who wants Money to commence, pursue or extend his Business, is more benefited by selling Stock of any Kind (even at a considerable Discount) than he could be by the Rise of it at a future Period; Every Man being able to judge better of his own Business and Situation, than the Government can for him. So much would not, perhaps, have been said on the Head of this Objection, if it did not naturally lead to a Position which has been ruinous and might prove fatal. There are many Men (and some of them honest Men) whose Zeal against Speculation leads them to be sometimes unmindful, not only of sound Policy, but even of Moral Justice. It is not uncommon to hear, that those who have bought the public Debts for small Sums, ought only to be paid their purchase Money. The Reasons given are, that they have take
n Advantage of the distressed Creditor, and shewn a Diffidence in the public Faith. As to the first, it must be remembered that in giving the Creditor Money for his Debt, they have at least afforded him some Relief, which he could not obtain elsewhere; and if they are deprived of the expected Benefit, they never will afford such Relief again. As to the Second, those who buy up the public Debts shew at least as much Confidence, in the public faith, as those who sell them; but allowing (for Argument’s sake) that they have exhibited the Dif fidence complained of, it would certainly be wiser to remove than to Justify it. The one Mode tends to create, establish and secure public Credit; and the other to sap, overturn and destroy it. Policy is therefore on this (as I believe it to be on every other occasion) upon the same Side of the Question with Honesty. Honesty tells us, that the Duty of the Public to pay is like the same Duty in an Individual. Having benefited by the Advances, they are bound to replace them to the Party, or to his Representatives. The Debt is a Species of Property, and whether disposed of for the whole nominal Value, or the half, for something or for Nothing, is totally immaterial. The Right of receiving, and the Duty of paying, must always continue the same. In a word, that Government which can (thro’ the Intervention of its Courts) compel Payment of private Debts, and Performance of private Contracts, on Principles of distributive Justice, but refuse to be guided by those Principles, as to their own Contracts and Debts, merely because they are not amenable to human Laws, shews a flagitious Contempt of moral Obligations, which must necessarily weaken, as it ought to do, their Authority over the People.
Before I conclude this long Letter, it would be unpardonable not to mention a Fund which has long since been suggested, and dwells still in the Minds of many. You Doubtless Sir anticipate my naming of what are called the back Lands. The question as to the Property of those Lands, I confess myself utterly incompetent to decide, and shall not, for that Reason, presume to enter on it. But it is my Duty to mention, that the offer of a Pledge the Right to which is contested, would have ill Consequences, and could have no Good ones. It could not strengthen our Credit because no one would rely on such a Pledge, and the Recurrence to it would give unfavorable Impressions of our political Sagacity. But admitting that the Right of Congress is clear, we must remember also, that it is disputed by some considerable Members of the Confederacy. Dissentions might arise from hasty Decissions on this Subject, and a Government torne by intestine Commotions, is not likely to acquire or maintain Credit, at Home or abroad. I am not however the less clear in my Opinion, that it would be alike useful to the whole Nation, and to those very constituent Parts of it, that the entire Disposition of these Lands should be in Congress. Without entering therefore into the litigated Points, I am induced to beleive, and for that Reason to suggest the proposing this Matter to the States as an amicable Arrangement. I hope to be pardoned when I add, that considering the Situation of South Carolina and Georgia, it might be proper to ask their Consent to Matters of the clearest Right. But that, supposing the Right to be doubtful, urging a Decision in the present Moment might have a harsh and ungenerous Appearance. But if we suppose this matter to be arranged, either in the one Mode or in the Other, so that the Right of Congress be rendered indisputable (for that is a previous Point of indispensible Necessity) the remaining Question will be as to the Appropriation of that Fund. And I confess it does not appear to me, that the Benefits resulting from it are such as many are led to beleive. When the Imagination is heated in Pursuit of an Object, it is generally overrated. If these Lands were now in the Hands of Congress, and they were willing to mortgage them to their present Creditors, unless this were accompanied with a due Provision for the Interest, it would bring no Relief. If these Lands were to be sold for the public Debts, they would go off for almost nothing. Those who want Money could not afford to buy Land. Their Certificates would be bought up for a Trifle. Very few moneyed Men would become possessed of them, because very little money would be invested in so remote a Speculation. The small Number of Purchasers would easily and readily combine. Of Consequence they would acquire the Lands for almost Nothing, and effectually defeat the Intentions of Government, leaving it still under the Necessity of making farther Provision; after having needlessly squandered an immense Property. This Reasoning is not new. It has been advanced on similar Occasions before, and the Experience which all America has had of the Sales of confiscated Estates, and the like, will now shew that it was well founded. The back Lands, then, will not answer our Purpose without the necessary Revenues. But those Revenues will alone produce the desired effect. The back Lands may afterwards be formed into a Fund, for opening new Loans in Europe on a low Interest, redeemable within a future Period (for Instance twenty Years) with a right reserved to the Creditors of taking Portions of those Lands, on the Non Payment of their Debts, at the Expiration of that Term. Two Modes would offer for Liquidation of those Debts. First to tender Payment during the Term, to those who would not consent to alter the Nature of the Debt; which (if our Credit be well established) would place it on the general Footing of national Faith. And Secondly, to sell Portions of the Land (during the Term) sufficient to discharge the Mortgage. I perswade myself that the Consent of the reluctant States might be obtained, and that this Fund might hereafter be converted to useful Purposes. But I hope that, in a Moment when the Joint Effort of all is indispensible, no Causes of Altercation may be mingled, unnecessarily, in a question of such infinite Magnitude as the Restoration of public Credit. Let me add, Sir, that unless the Money of Foreigners be brought in for the Purpose, Sales of public Land would only absorp that Surplus Wealth, which might have been exhaled by Taxes, so that in Fact no new Resource is produced. And that, while (as at present) the Demand for Money is so great as to raise Interest to five per Cent per Month, public Lands must sell extremely low were the Title ever so clear; what then can be expected when the Validity of that Title, is one Object of the War? I have the Honor to be with great Respect your Excellency’s most obedient Servant
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